what is a shortage in economics

In economics, a shortage occurs when the demand for a product or service exceeds its supply in a market. It is the opposite of an excess supply or surplus. In a normally functioning market, there is an equilibrium between the quantity demanded and quantity supplied at a price point dictated by market forces. A shortage is a situation in which demand for a product or service exceeds the available supply, and the market is said to be in a state of disequilibrium. Usually, this condition is temporary as the product will be replenished and the market regains equilibrium. Shortages can be caused by an increase in demand, a decrease in supply, or government intervention such as price ceilings. Shortages can be managed by boosting production, finding alternate suppliers, rationing existing supply, or waiting for the market to correct itself. It is important to note that a shortage should not be confused with the economics term "scarcity," in that shortages are usually temporary and can be corrected, while scarcities tend to be systemic and cannot be readily replenished.